EMP. STATE INSURANCE CORPORATION versus H.M.T. LTD. AND ANR.

EMP. STATE INSURANCE CORPORATION versus H.M.T. LTD. AND ANR.

Section 85-B of the Employees State Insurance Act, 1948 confers discretionary, not mandatory, power to levy damages for delayed deposit of contribution; the levy must consider the existence of mens rea or actus reus, and Regulation 31C must be interpreted in accordance with the Act. The matter should be reconsidered by the High Court, not determined by it substituting its own discretion for that of the statutory authority.

Parties
Appellant: Employees State Insurance Corporation; Respondent: H.M.T. Ltd.; Respondent: Another (Anr.)
Jurisdiction
India
Judgment Date
11 January 2008
Procedural Posture
Civil Appeal / Appeal From High Court Judgment and Order Dated 12.9.2005, Remanded to High Court
Outcome
Appeal allowed; High Court judgment set aside; matter remitted to High Court for fresh consideration.
Legal Topics
Employees State Insurance Act, Levy of Damages, Interpretation of Enabling Statutory Provisions, Subordinate Legislation, Penalty/mens Rea
Labour Law Social Security Law Employees State Insurance Act Levy of Damages Interpretation of Enabling Statutory Provisions Subordinate Legislation Penalty/mens Rea

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Parties

Employees State Insurance Corporation

Appellant

H.M.T. Ltd.

Respondent

Another (Anr.)

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment and Order Dated 12.9.2005, Remanded to High Court

Legal Issues

  1. 1 Whether Section 85-B of the Employees State Insurance Act, 1948 and Regulation 31C of the ESI (General) Regulations, 1950 require mandatory levy of damages for delay in deposit of contributions
  2. 2 Whether damages under Section 85-B are to be levied in all cases of delay or at the discretion of the authority
  3. 3 Whether existence of mens rea or actus reus is necessary for levy of damages

Ratio Decidendi

Section 85-B of the Employees State Insurance Act, 1948 confers discretionary, not mandatory, power to levy damages for delayed deposit of contribution; the levy must consider the existence of mens rea or actus reus, and Regulation 31C must be interpreted in accordance with the Act. The matter should be reconsidered by the High Court, not determined by it substituting its own discretion for that of the statutory authority.

Court Disposition

Appeal allowed; High Court judgment set aside; matter remitted to High Court for fresh consideration.

Orders

  • Impugned judgments set aside.
  • Matter remitted to High Court for consideration afresh in light of Supreme Court observations.